Amano said the talks would continue until a final agreement is reached.

"The issue of the fuel swap was discussed, but there should not be any expectation of signing an agreement (now). The talks will continue," he added.

"The meeting was held in a business-like atmosphere," the International Atomic Energy Agency (IAEA) said in a statement which did not provide any further detail.

The two sides "discussed the issue of the provision of fuel for the Tehran research reactor and exchanged views on the possible modalities for its realisation", said IAEA spokeswoman Gill Tudor, Xinhua reported.

"Given the circumstances, the IAEA and the director general can play a more constructive role at this point. We believe that the fuel exchange deal is a move that can build multilateral trust. It serves everyone’s interests," Mottaki said at the meeting.

In October, Iran agreed in principle to send low-enriched uranium abroad for further re-processing. But later it said the fuel swap should take place inside its territory and simultaneously.

The West believes Iran`s nuclear programme is aimed at making atomic bombs while Tehran says it is for peaceful purposes only.